Editor’s Corner—Comcast, Disney would both sell off Fox’s RSNs, but who would buy them?

Amid the details of Comcast’s rival $65 billion bid for Fox is the revelation that both Comcast and Disney would be willing to sell off Fox’s regional sports networks if regulators deem it necessary.

Recode spotted the clause in Comcast’s letter to Fox shareholders spelling out the details of its competitive bid to the existing $52.4 billion deal with Disney. Specifically, Comcast said it would match Disney’s “commitment to divest (i) any of 21CF’s RSNs and (ii) other 21CF assets representing up to $500 million of EBITDA (less up to $250 million of EBITDA attributable to divested RSNs).”

Fox owns more than 20 RSNs, and those networks own broadcast rights for various teams from the MLB, NBA, NFL and NHL.

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As Recode’s Peter Kafka points out, both companies have reasons to keep the RSNs. The networks would slot in nicely among NBCUniversal’s current RSN footprint, and Disney could incorporate the networks into its ESPN network group.

In December when the Disney-Fox deal was first announced, Disney CEO Bob Iger called the RSNs a “perfect complement” to ESPN’s current offering. He said ESPN is basically a national program service and that the RSNs are regional and local in nature. He compared ESPN’s and the RSNs’ upcoming relationship to a network and its affiliate stations.

But he said that Disney is not currently anticipating a considerable value proposition from the RSNs for the ESPN direct-to-consumer product since the RSNs will primarily continue to be distributed as they have been distributed by multichannel providers.

“If there’s an opportunity to bring their product more in the direct-to-consumer vein, we’ll take full advantage of that,” Iger said.

As Kafka also points out, sports rights are expensive and the prices are continuing to go up, which is a suitable enough reason for either company to part ways with some, most or all of the networks. But who would buy them?

The most logical answer would be whoever (Comcast or Disney) doesn’t come out on top in the Fox sweepstakes. Being able to add the pricey but valuable RSNs to the portfolio would be a nice consolation prize for either company.

Alan Wolk, co-founder and lead analyst at media consulting firm TV[R]EV, said that RSNs remain a hot commodity in the television business.

“I think RSNs are really valuable to anyone because as the vMVPDs get going, having the RSNs signed up will push people to sign up for one or the other,” Wolk said.

Wolk said that CBS already has a “strong sports offering” with its various traditional and digital networks and could want to add more live sports to the mix.

CBS Sports HQ, the network’s recently launched ad-supported digital network, could be a landing spot for the kind of rights on Fox’s RSNs, but CBS has been clear that it wants its new network to be more about news and talk and less about live sports.

If another broadcaster doesn’t bite on the RSNs, a digital giant could certainly swoop in. Wolk said Amazon—which has been snapping up sports rights left and right—could be a player and that it has a big advantage because it can do merchandizing on top of any live sports deal and can get away with targeting advertising.

Facebook has also been aggressive in its sports licensing efforts and could be interested in going after the networks.

Google, which owns and operates sports-heavy YouTube TV, might like owning those RSNs along with most of the ad inventory, as opposed to paying Fox for the right to carry them.

“It would be a bold move by any of the digital guys,” Wolk said.

Of course, if a FAANG company bought the RSNs, it would put them in the unfamiliar territory of having to negotiate carriage with distributors and run more full-fledged linear sports broadcast operations as opposed to the more limited sports streaming options.

While the current bidding war for Fox plays out, the fate of the RSNs remains a distant concern. But should the need to offload those networks arise, it will be fascinating to see where they land. — Ben | @fierce_video